ORION CORPORATION
HALF-YEAR FINANCIAL REPORT 1-6/2021
19 JULY 2021 at 12:00 noon EEST
Orion Group Half-Year Financial Report 1-6/2021
This is a summary of Orion’s Half-Year Financial Report 1-6/2021. The complete report is attached to this stock exchange release and is available at https://www.orion.fi/en/Orion-group/investors/financial-reviews-and-presentations/
- Net sales totalled EUR 524 million (EUR 572 million in 1–6/2020).
- Operating profit was EUR 146 (181) million.
- Profit before taxes was EUR 145 (180) million.
- Equity ratio was 68% (65%).
- ROCE before taxes was 36% (44%).
- ROE after taxes was 32% (38%).
- Basic earnings per share were EUR 0.82 (1.02).
- Cash flow per share before financial items was EUR 0.53 (0.90).
- The outlook for 2021 remains unchanged. Orion estimates that net sales in 2021 will be slightly lower than in 2020 (net sales in 2020 were EUR 1,078 million). Operating profit is estimated to be lower or clearly lower than in 2020 (operating profit in 2020 was EUR 280 million).
KEY FIGURES
| 4-6/21 | 4-6/20 | Change % | 1-6/21 | 1-6/20 | Change % | 1-12/20 | |
| Net sales, EUR million | 254.9 | 292.5 | -12.8% | 523.6 | 572.4 | -8.5% | 1,078.1 |
| EBITDA, EUR million | 82.0 | 110.7 | -25.9% | 168.0 | 209.2 | -19.7% | 336.5 |
| % of net sales | 32.2% | 37.8% | 32.1% | 36.6% | 31.2% | ||
| Operating profit, EUR million | 71.0 | 96.4 | -26.3% | 146.0 | 180.8 | -19.2% | 280.1 |
| % of net sales | 27.9% | 33.0% | 27.9% | 31.6% | 26.0% | ||
| Profit before taxes, EUR million | 70.4 | 96.5 | -27.1% | 145.2 | 179.9 | -19.3% | 278.3 |
| % of net sales | 27.6% | 33.0% | 27.7% | 31.4% | 25.8% | ||
| Profit for the period, EUR million | 56.0 | 75.6 | -26.0% | 115.5 | 143.0 | -19.2% | 219.9 |
| % of net sales | 22.0% | 25.8% | 22.1% | 25.0% | 20.4% | ||
| R&D expenses, EUR million | 28.8 | 32.3 | -10.9% | 53.9 | 59.2 | -8.9% | 123.2 |
| % of net sales | 11.3% | 11.1% | 10.3% | 10.3% | 11.4% | ||
| Capital expenditure, EUR million | 14.4 | 10.8 | +33.1% | 26.4 | 21.2 | +24.8% | 48.5 |
| % of net sales | 5.7% | 3.7% | 5.0% | 3.7% | 4.5% | ||
| Interest-bearing net liabilities, EUR million | -51.1 | -53.2 | -4.0% | -185.8 | |||
| Basic earnings per share, EUR million | 0.40 | 0.54 | -26.0% | 0.82 | 1.02 | -19.2% | 1.56 |
| Cash flow per share before financial items, EUR | 0.33 | 0.56 | -40.1% | 0.53 | 0.90 | -41.2% | 1.85 |
| Equity ratio, % | 68.2% | 65.3% | 66.7% | ||||
| Gearing, % | -7.3% | -7.5% | -25.4% | ||||
| ROCE (before taxes), % | 35.6% | 44.4% | 34.8% | ||||
| ROE (after taxes), % | 32.3% | 38.4% | 29.1% | ||||
| Average personnel during the period | 3,362 | 3,336 | +0.8% | 3,337 |
President and CEO Timo Lappalainen:
Orion's operating profit excluding milestone payments on par with previous year
“2021 has marched on steadily despite the exceptional circumstances brought on by the COVID-19 pandemic. For Orion, this has meant continuing to focus on looking after the health and safety of our employees and ensuring production continuity, product availability and patient safety in ongoing clinical trials.
Orion's net sales in January-June 2021 were EUR 524 (572) million and the company's operating profit was EUR 146 (181) million. The anticipated decline in net sales and operating profit was mainly attributable to three factors: the milestone payments that were clearly smaller than in the comparison period, a drop in the sales of Dexdor® and Simdax® owing to the expiration of their product patent protection and the expiration of a significant distribution agreement for veterinary drugs last year. Nubeqa® product net sales booked by Orion increased as strongly as expected. The Specialty Products unit's net sales were at a good level on the whole, although they did decrease from the strong comparison period. In some product groups, the demand has been clearly weaker than normal. This owes itself to various restrictions relating to the COVID-19 pandemic, which have resulted in a reduced prevalence of seasonal illnesses as opposed to the norm and a dip in the number of medical appointments. These consequences of the pandemic also had a negative effect on the demand for the Easyhaler® products. The Animal Health unit's business developed vigorously in all markets due to new product launches and distribution agreements, among other things. On the whole, the unit's net sales fell short of the comparison period because of the said expiration of a significant distribution agreement.
During the review period, we received positive news of our research and development projects, as Tessie®, a veterinary drug developed by Orion, was recommended for marketing authorisation by the Committee for Medical Products for Veterinary Use (CVMP) of the European Medicines Agency (EMA) and Bonqat®, another veterinary drug developed by Orion, received a marketing authorisation from the European Commission.
More good news came in from Orion's digital therapies development projects, as the VIRPI trial, which examined the effects of utilising virtual reality therapy in the treatment of chronic low back pain, reported positive results in June.
In the review period, we decided to discontinue the development of a new dry powder inhaler and focus on developing the existing Easyhaler® platform as well as improving competitiveness. The Easyhaler® technology has been on the market for decades and is the subject of continued development.
The estimate concerning the completion of the Phase III ARASENS clinical trial on darolutamide with Bayer was updated in the review period, and the trial is currently expected to reach primary completion in the final quarter of 2021. Orion's other key clinical development projects proceeded as expected in the review period.
The global pharmaceutical supply chains have functioned fairly well from Orion's perspective throughout the pandemic, and so far we have not experienced any material disruptions or shortages. To our current knowledge, no disruptions or shortages are expected to affect the outlook for the rest of 2021 either. The risk associated with disturbances in global supply and logistics chains continues to be higher than usual, and we have taken various measures to mitigate it, such as increasing the stock levels of products, raw materials and supplies clearly above their long-term averages. Travel and other restrictions resulting from the pandemic have not caused labour shortages at Orion so far, and we have been able to carry out all maintenance procedures and scheduled production shutdowns as planned, even those requiring special expertise.
In the review period, we continued our determined work to achieve Orion's strategic growth target and commenced preparations to expand our non-European operations to Australia and New Zealand, among other things. Last year, we expanded our operations to Singapore, Malaysia and Thailand, and operations in these countries have started as planned. We have also continued our systematic work to identify and evaluate targets for product and business acquisitions.”
Outlook for 2021 (provided on 9 February 2021)
Orion estimates that net sales in 2021 will be slightly lower than in 2020
(net sales in 2020 were EUR 1,078 million).
Operating profit is estimated to be lower or clearly lower than in 2020
(operating profit in 2020 was EUR 280 million).
Webcast and conference call
A webcast and a conference call for analysts, investors and media will be held on Monday, 19 July 2021 at 13.30 EEST. The event will be held only online and by conference call.
A link to the live webcast will be available on Orion's website at www.orion.fi/en/investors. A recording of the event will be available on the website later the same day.
To participate the conference call, please dial:
Finland: +358 9 817 103 10
Sweden: +46 8 566 426 51
UK: +44 333 300 0804
USA: +1 631 913 1422
PIN: 85134267#
Orion calendar
| Interim Report January-September 2021 | Wednesday 20 October 2021 |
| Financial Statement Release for 2021 | Thursday 10 February 2022 |
| Annual General Meeting 2022 | Planned to be held on Wednesday 23 March 2022 |
| Interim Report January-March 2022 | Thursday 28 April 2022 |
| Half-Year Financial Report January-June 2022 | Friday 15 July 2022 |
| Interim Report January-September 2022 | Thursday 20 October 2022 |
The Financial Statements and the Report of the Board of Directors for 2021 will be published on the Company's website at the latest in week 9/2022.
Espoo, 19 July 2021
Board of Directors of Orion Corporation
Orion Corporation
For additional information about the report:
Jari Karlson, CFO tel. +358 50 966 2883
Tuukka Hirvonen, Investor Relations tel. +358 10 426 2721 or +358 50 966 2721
Publisher:
Orion Corporation
http://www.orion.fi/en
http://www.twitter.com/OrionCorpIR
Orion is a globally operating Finnish pharmaceutical company – a builder of well-being. Orion develops, manufactures and markets human and veterinary pharmaceuticals and active pharmaceutical ingredients. The company is continuously developing new drugs and treatment methods. The core therapy areas of Orion's pharmaceutical R&D are neurological disorders, oncology and respiratory diseases for which Orion develops inhaled pulmonary medication. Orion's net sales in 2020 amounted to EUR 1,078 million and the company had about 3,300 employees at the end of the year. Orion's A and B shares are listed on Nasdaq Helsinki.
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